Disposed

Uttar Pradesh Power Corporation Ld, v. M/S Rajpootana Chables and Conductors Vt. Ltd.

Chhattisgarh HC11 Aug 2024WP227/175/2018

Case brief

AI extract

What is this about?

Writ petition against an MSME Facilitation Council award and appellate pre-deposit requirement. Counsel conceded that Section 19 MSMED Act makes a 75% pre-deposit mandatory per Tirupati Steels and Aska Equipments. Petition was disposed with liberty to seek instalment payment of the deposit before the Appellate Court.

What did the court decide?

Petition disposed; petitioner granted liberty to file hardship application for instalment pre-deposit before the Appellate Court, to be considered on merits within stipulated timelines.

Uttar Pradesh Power Corporation Ld, Vs M/S Rajpootana… — Arbitration | Chhattisgarh HC (2024)

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2024:CGHC:30259

NAFR

HIGH COURT OF CHHATTISGARH AT BILASPUR

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WP227 No. 175 of 2018

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Uttar Pradesh Power Corporation Ld, Through Chief Engineer Madhayanchal Vidyut Vitran Nigam Ltd, 4- A- Kokhley Marg, Lucknow (U. P.)

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... Petitioner

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versus

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1. M/s Rajpootana Chables And Conductors Vt. Ltd 67, Industrial Area, Korba, District- Korba, Chhattisgarh

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2. Micro And Small Enterprises Facilitation, Council Chhattisgarh Raipur, Through Its Director Office Udyog Sanchalnalaya Raipur, Chhattisgarh

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... Respondents

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For Petitioner : Mr. Anand Mohan Tiwari, Advocate. For Respondent No.1 : Mr. Devershi Thakur, Advocate.

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Hon'ble Shri Justice Deepak Kumar Tiwari

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Order On Board

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12/08/2024

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1. This petition has been filed under Article 226/227 of the Constitution of India

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by the petitioner for the following reliefs:-

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“10.1 This Hon’ble Court may please be kind enough in

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calling the entire records of Uttar Pradesh Power Corporation Ld. V/S M/s Rajpootana Chbles and conductors Pvt. Ltd.

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10.1(a) This Hon’ble Court may please to hold the judgment dated 25.06.2016 issued on 12.04.2017 (Annexure P/5) as without jurisdiction of Respondent No.2.

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10.2 This Hon’ble Court may please be kind enough to modified the impugned order dated 08.12.2017 and directed the petitioner to deposit Bank Guarantee and/ or Security and/ or both to fulfill the condition provided for pre-deposit of 75% amount of the award.

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10.3 Any other relief which this Hon’ble Court deems fit may please be granted and the cost of the petition may also be kindly allowed.”

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2. At the outset, learned counsel for the petitioner fairly admits that now the predeposit of 75% of the awarded amount under Section 19 of the Micro Small & Medium Enterprises Development Act, 2006 (for short “the Act, 2006”) is mandatory as per the law laid down in the matter of Tirupati Steels vs. Shubh Industrial Component And Another (2022) 7 SCC 429, wherein, the following observation has been made at para 8 and 9:-

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8. The question which is posed for consideration of this Court is, whether, the pre-deposit of 75% of the awarded amount as per Section 19 of the MSMED Act, 2006, while challenge to the award underr Section 34 of the Arbitration Act, 1996, is made mandatory or not, is now no longer res integra in view of the decision of this Court in Gujarat State Disaster Management Authority Vs. Aska Equipments Limited; (2022) 1 SCC 61. While interpreting Section 19 of the MSMED Act, 2006 and after taking into consideration the earlier decision of this Court in Goodyear (India) Ltd. Vs. Norton Intech Rubbers (P) Ltd (2012) 6 SCC 345, it is observed and held that the requirement of deposit of 75% of the amount in terms of the award as a predeposit as per Section 19 of the MSMED Act, is mandatory. It is also observed that however, at the same time, considering the hardship which may be

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projected before the appellate court and if the appellate court is satisfied that there shall be undue hardship caused to the appellant/applicant to deposit 75% of the awarded amount as a pre-deposit at a time, the court may allow the pre-deposit to be made in instalments. Therefore, it is specifically observed and held that predeposit of 75% of the awarded amount under Section 19 of the MSMED Act, 2006 is a mandatory requirement.

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9. In para 13 of the aforesaid judgment, it is observed and held as under:-(Aska Equipments case, SCC p.64, para 13)

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“13. On a plain/fair reading of Section 19 of the MSME Act, 2006, reproduced hereinabove, at the time/before entertaining the application for setting aside the award made under Section 34 of the Arbitration and Conciliation Act, the appellantapplicant has to deposit 75% of the amount in terms of the award as a pre-deposit. The requirement of deposit of 75% of the amount in terms of the award as a predeposit is mandatory. However, at the same time, considering the hardship which may be projected before the appellate court and if the appellate court is satisfied that there shall be undue hardship caused to the appellant-applicant to deposit 75% of the awarded amount as a pre-deposit at a time, the court may allow the pre-deposit to be made in instalments.”

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3. At this juncture, learned counsel for the petitioner would submit that the petition may be disposed with liberty to the petitioner to file an appropriate application for depositing the aforesaid mandatory deposit in installments before the concerned Appellate Court as the Petitioner concerned is a Government Undertaking, facing hardship to deposit the subject amount in lump-sum. On filing of such application, if the Appellate Court is satisfied with regard to the said fact, it may pass an appropriate order in this respect.

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4. Learned counsel for respondent No.1 would not oppose the said limited prayer.

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5. Having considered the aforesaid submissions of learned counsel for the parties, it is evident that the Act, 2006 is a Special Act and governs the transactions and contract for facilitating the promotion and development and enhancing the competitiveness of Micro, Small & Medium Enterprises.

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Section 16 of the Act, 2006 especially deals with the date from which and rate at which interest is payable. Against the impugned award, the petitioner has filed an Appeal, which is pending consideration and under Section 19 of the Act, 2006, pre-deposit of 75% of the amount in terms of the decree, award is mandatory. However, in such circumstances, when the judgment debtor demonstrate any hardship before the Appellate Court, the Appellate Court while exercising its discretion may allow payment of such mandatory deposit in installments. The petitioner has not filed any such application before the concerned Appellate Authority till so far.

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6. In view of the above, it is expected that if the petitioner files a copy of this order along with all the relevant documents to demonstrate any hardship caused to the Petitioner concern, within a period of 30 days, the Appellate Court shall consider the said application strictly on its own merits in accordance with law and decide the same in an expeditious manner preferably within an outer limit of 45 days, after filing of the said application. In case, the petitioner does not file such application within the stipulated period, the concerned Appellate Court shall decide the said Appeal forthwith in an expeditious manner in accordance with law.

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7. With the aforesaid observations, this Petition stands disposed of.

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Sd/-

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(Deepak Kumar Tiwari) Judge

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Priyanka

Uttar Pradesh Power Corporation Ld, v. M/S Rajpootana Chables and Conductors Vt. Ltd.

Case brief

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Uttar Pradesh Power Corporation Ld, v. M/S Rajpootana Chables and Conductors Vt. Ltd.

Case brief

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